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Eco-Efficient Agriculture for the Poor WWW.ciat.cgiar.org
Jeimar Tapasco
Andy Jarvis
Economic analysis for
adaptation/mitigation alternatives
Eco-Efficient Agriculture for the Poor
Eco-Efficient Agriculture for the Poor
Types of costs and benefits (explicit and implicit) :
- Direct outlays (explicit)
- Partial equilibrium
- General equilibrium
- Environmental and social
Financial costs (outlays) are
the most intuitive
Eco-Efficient Agriculture for the Poor
Financial vs. Economic cost
Eco-Efficient Agriculture for the Poor
After costs/benefits are identified, then:
• Cost Benefit Analysis (CBA)
– Basis of comparison for decision-making
– Determine if a project, policy, investment is worthwhile
OR • Cost Effectiveness Analysis (CEA)*
– OUTCOMES
* CAE (US$/tCO2eq)
Eco-Efficient Agriculture for the Poor
Adaptation
Cost Benefit Analysis (CBA)
•But you can use Cost Effectiveness Analysis (CEA) to analyze other objectives
Mitigation
Cost Effectiveness Analysis (CEA)
•But you should be use Cost Benefit Analysis (CBA) to calculate net benefits or costs
Eco-Efficient Agriculture for the Poor
Technicalities: - Uncertainty - Social discount rate - First or second best
Complications:
- Constrained markets (micro-level) - Environmental cost (externalities) - Social cost (they ignore equity issues)
IPCC Expert Meeting on
Economic Analysis, Costing
Methods, and Ethics. Lima, Peru
(2011)
Eco-Efficient Agriculture for the Poor
Economic
efficiency is not the
only objective for society.
Eco-Efficient Agriculture for the Poor
CIAT Work
Colombia
Eco-Efficient Agriculture for the Poor
Business as usual: Agriculture (Colombia)
Business as usual: Livestock
(Colombia)
Eco-Efficient Agriculture for the Poor
Identifying alternatives • Expert workshop
• Regional workshop with local stakeholders
• Consult crop/agricultural federations
• Meet with government officials to determine political feasibility
• Prioritize – focus on WIN-WIN alternatives
• Identify potential barriers (social, cultural, economic)
Eco-Efficient Agriculture for the Poor
Mitigation and adaptation measures Livestock Rice
• Improved irrigation systems
• Silvo- and agro-pastoral systems
• Testing alternatives to efficient use of N-
Fertilizer
• Improved pasture
• Research (focus on animal genetics)
• Water efficiency
• Efficient use of N-fertilizers
• Clean Development Mechanism
project formulation
• Agricultural insurance programs
• Research (focus on biotechnology)
• Land leveling
• Improved irrigation systems
Eco-Efficient Agriculture for the Poor
Direct outlay cost
Mitigation and Adaptation
Eco-Efficient Agriculture for the Poor
Mitigation
Adaptation
Eco-Efficient Agriculture for the Poor
Current policies New policies A
DA
PTA
TIO
N
MIT
IGA
TIO
N
Eco-Efficient Agriculture for the Poor
Is it feasible for
the private sector to bear
the costs of adaptation & mitigation?
Eco-Efficient Agriculture for the Poor
Cost Effectiveness Analysis
Mitigation
Eco-Efficient Agriculture for the Poor
Alternative Potential area
(ha)
Carbon
Potential
Abatement
(Thousand
tCO2eq/year)
Cost
effectiveness
($US/tCO2eq)
Min Max
Silvopastoral systems
(SSPi) 3.739.109 28.895 -49 0.6
Improved pasture 51,487 54 -103 -62
Fruits (replacing
pasture) 359,320 1,938 -188 -25
Efficient use of N-
Fertilizer 170,000 38 -267 145
Potential area, Cost and Potential mitigation
from alternatives (2012-2040)
Eco-Efficient Agriculture for the Poor
Silvopastoral systems: A mini-revolution in
Colombia and Central America
Initial state: July 17, 2007
August15, 2008
13 months
October 22, 2008
15 months
Eco-Efficient Agriculture for the Poor
MAC curve showing the potential CO2e capture for the implementation of SSPi in different regions of Colombia
Eco-Efficient Agriculture for the Poor
N-fertilizer on rice
Eco-Efficient Agriculture for the Poor
Measure
Potential area
(ha) tCO2e/year
Leveling land Cucuta 16,900 197,052
Technical assistant Tolima and Huila 67,049 84,785
Leveling land Jamundi 5,113 66,812
Crop residues management Espinal 13,900 26,271
Technical assistant Meta 74,005 14,754
Technical assistant Cucuta 11,404 10,161
Technical assistant Bajo Cauca 47,346 5,705
Technical assistant Casanare and Arauca 64,897 4,726
Technical assistant Cesar, Magdalena and Guajira 12,068 4,241
Crop residues management Yopal 6,985 3,300
Crop residues management Valledupar 3,035 3,278
Technical assistant Casanare 13,488 1,934
Technical assistant Jamandi 1,300 1,060
Potential CO2e to reduce
Eco-Efficient Agriculture for the Poor
MAC curve for more efficient N-fertilizer on rice
Eco-Efficient Agriculture for the Poor
Work wrong Work well
Eco-Efficient Agriculture for the Poor
Cost (benefit) -1.000.000 -1.000.000
Carbon capture 1 1.000.000
Eco-Efficient Agriculture for the Poor
Private perspective
Public perspective
Eco-Efficient Agriculture for the Poor
Economic tools
must be appropriate for the problem at
hand.
CAUTION!!
Eco-Efficient Agriculture for the Poor
Others CIAT work
Ongoing • GIZ / CONANP Mexico (Programming)
• ESPA Colombia (Programming)
Upcoming • DNP – Colombia (Econometric as input for a GEM)
• PNUMA Colombia, Ecuador y Perú (Assessing impact and prioritizing)
• FONDO de ADAPTACION Colombia (CBA direct outlays)
Eco-Efficient Agriculture for the Poor
Some gaps…
• More programming work
– Better understanding of implication of mitigation and adaptation measures on small farmers
• Environmental and social cost
• Links between mitigation and adaptation
